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What Is Net Promoter Score? And Why It Matters To Your Business
What Is Net Promoter Score?
Net Promoter Score, or NPS, measures customer experience and predicts business growth. This proven metric, developed by Fred Reicheld and Bain & Company in 2004, transformed the business world and now provides the core measurement for customer experience management programs.
On a scale of 0 to 10, with 10 being highest, How likely is it that you would recommend [brand] to a friend or colleague? That is the basic Net Promoter Score question, which, in other words, means: Did the company, or whomever the customer was interacting with, do a good enough job to garner a 9 or a 10?
Let’s see how the NPS is calculated.
The NPS Calculation
The way NPS is calculated is by using the answer to a Net Promoter Score Survey:
“How likely is it that you would recommend [brand] to a friend or colleague?”
Replies are grouped as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
So, what is considered a strong NPS?
Given the NPS range of -100 to +100, a “positive” score or NPS above 0 is considered “good”, +50 is “Excellent,” and above 70 is considered “world class.” Based on global NPS standards, any score above 0 would be considered “good.” This simply means that the majority of your customer base is more loyal.
The good think of using NPS Score is that you’re using a very simple survey that provides broad insight. From the broader information, you can go vertical and gather specific feedback.
Our experience using NPS Score is that most customers will take the short NPS survey and even answer one or two questions more if you need it. Two of our favorite questions to follow the standard 1-to-10 survey are to ask, “Why?,” and if the number is lower than a 10, “What would it take to raise our score just by one point?” In other words, go from a six to a seven, or a nine to a 10. That is important feedback that any company can use.
Basically, on that article, Bruce Temkin says that if you use your NPS as the key measure of your customers’ overall perception of your brand, and combine this with other metrics and insights from various points along the customer journey, you’ll have a comprehensive, actionable view of your customer experience performance.
But It’s not about the metric you are using to acquire and measure feedback. The Net Promoter Score measurement means nothing unless you do something with it.
Beyond the NPS Score, you must understand what is driving the score. What is causing promoters to give you the nine or 10? What do the detractors dislike about your company or the service?
Don’t just focus on fixing the detractors, that’s, of course, one of the key things of using a NPS survey, but identifying the promoters is also very important because you can use them to ask for public reviews or reward them with special discounts to keep them happy.
At 10to8, we use Wootric to analyze the performance of our NPS. Businesses that use 10to8 to manage their appointments have given us a 51 Net Promoter Score, which is considered as excellent! We are continually working on new ways to increase our NPS and in the past months, we’ve increased our score by 4 points, so that’s a good sign!
The main thing that we’ve done is to improve our customer support and our communication with clients. We believe that customer communication is the key to succeed in 2018.
Business is about relationships and they are people-to-people, human-to-human. The technology exists to help you, not to replace you.
That’s why at 10to8 Scheduling Software we help businesses to better communicate with their clients. By using an online booking page, automated reminders and a 2-way chat between business and client, you can make sure you’re providing the best customer experience and customers will compensate you for it.